Byline: Mohd Anwar Yahya and Lee Seng Chee

Malaysia has implemented many different private sector participation models under its Privatisation Master Plan. The results of these projects are arguably varied. Some of them have been restructured due to their unsustainable financial situations.

Under the private finance initiative (PFI) framework, the remuneration to the private sector is directly derived from the public sector or the government, and less from public users themselves.

This creates greater certainty in cash flows and thereby achieving greater financial viability. With these benefits, PFI is widely perceived to be suitable for projects where the commercial viability of the projects is borderline, especially where there is no government grant or subsidy readily available.

In addition, there can be greater flexibility in PFI such that sensitive operations may be retained by the government while the assets and maintenance package may be managed by the private sector.

PFI payments are, however linked to performance measurements . Read whole article (21 KB)


This article first appeared in The Edge, 20 Aug 2007